“The U.S. dairy sector exports 15% of its milk production, or one day’s worth of milk production out of each week. In 2015, those exports were worth over $5bn and helped generate more than 120,000 jobs in dairy farming, manufacturing and related sectors,” Matt McKnight, acting chief of staff for USDEC, said.
The TPP was a trade agreement put together during the Obama administration and involved a dozen countries that border the Pacific Ocean, including major dairy producers Mexico, Canada, and New Zealand. The agreement would essentially create a single market economy for the trading of manufactured goods and agricultural products including dairy, but it had not yet come into effect because it had not been ratified by all 12 countries.
Trump called TPP a “potential disaster” for the US economy as he and several US labor groups said the deal would take away jobs from developed countries like the US because large companies would be more inclined to set up factories in less-developed countries with lower employee wages.
However, TPP would have required that participating less-developed countries abide by international labor laws, including implementing a minimum wage and safe working conditions.
US dairy groups urge Trump to protect trade relationships
Under TPP, US farmers would have benefitted from an increase in dairy exports as well as enjoyed the reduced taxes on those exports that would fall under the trade partnership.
According to NMPF and USDEC, Mexico represents the number one market for US dairy exports, totalling $1.2bn in 2016.
US dairy groups including NMPF and USDEC urged the Trump Administration to not retreat from TPP as it would protect the agricultural trade relationship between the US and Mexico, as well as grow US dairy influence in growing markets like Asia.
“While we recognize that TPP as it now stands has no path forward, we urge the Trump Administration to look for future opportunities to increase our dairy exports in Asia and around the world. Our competitors have been successfully negotiating trade agreements over the past several years. This puts the US agriculture sector at a competitive disadvantage if we don’t pursue our own initiatives,” NMPF president and CEO Jim Mulhern said.
The Trans-Pacific Partnership “was far from perfect, but was beneficial to the US dairy sector because in addition to new market access, it also made significant progress in focusing on other barriers, including sanitary/phytosanitary standards, as well as the abuse of geographical indications to block competition in common food categories,” McKnight said.